Global Sources
EE Times-Asia
Stay in touch with EE Times Asia
EE Times-Asia > Manufacturing/Packaging

Samsung expects recovery after profits tumble again

Posted: 18 Jul 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Sean Shim? Samsung? Q2 operating profits? NAND flash? DRAM?

Battered by seasonal weak demand and tumbling prices, Samsung Electronics Co. Ltd reported a second consecutive quarterly drop in operating profits.

In a regulatory filing, Samsung said it posted a 12.1 percent quarter-on-quarter decline in operating profits to $1.48 billion in Q2 ended June 30, on sales of $14.73 billion. The company recorded a 24.4 percent quarter-on-quarter profit drop Q1 of this year, with profit at the lowest in three years since it earned $1.21billion in Q2 2003.

Much of the profitability deterioration stemmed from seasonal demand weakness and strong pricing pressures in its mainstream markets, from memory chips to TFT-LCDs and mobile phones. Steeper-than-expected price drops in NAND flash memory were the main culprit. But prices started to stabilize in May, as demand embedded flash and multichip packages improved, slowing price declines.

While NAND flash was weak, DRAM profit margins improved due to tightening supply, said Samsung. Overall memory chip sales grew 3 percent to $3.79 billion, while revenues from SoC, CMOS sensors and flat panel drive ICs grew 6 percent quarter-on quarter to $542 million.

Overall, Samsung's semiconductor sales dropped 12.1 percent sequentially to $1.02 billion on sales of $4.61 billion.

Samsung's LCD operations suffered a quarter-on-quarter 30.6 percent drop in operating profit to $73 million. Average LCD panel prices fell 18 percent for 19-inch monitors, 21 percent for 15.4-inch notebooks and 10 percent for 40-inch TVs. But unit sales grew 6 percent sequentially due to brisk demand for 40-inch and larger TV panels.

In mobile phones, the company posted an 8 percent quarter-on-quarter decline to $4.22 billion. On a unit basis, phone sales fell 9 percent to $27,460.

Samsung senior vice president Chu Woo-Sik expects a stronger second half, with global sales of NAND flash, LCD, and handsets improving with NAND profits projected to reach 40 percent the Q3, up 10 percent from Q2.

- Sean Shim
EE Times

Article Comments - Samsung expects recovery after profi...
*? You can enter [0] more charecters.
*Verify code:


Visit Asia Webinars to learn about the latest in technology and get practical design tips.

Back to Top